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The principle of carbon offsetting

It makes no difference to the global climate, where in the world greenhouse gases (GHG) are emitted and where they are reduced. As a result GHG can be emitted in one corner of the globe and be offset somewhere totally different.

Air travel is a considerable and relevant source of GHG. Current scientific studies estimate tat global air travel contributes approx. 5% to human induced climate change (NFI 2008). Ideally flying would be avoided completely: i.e. travelling via bus or train or taking part in conferences virtually using video conferencing. If, however, air travel is unavoidable, carbon offsetting offers the possibility to reduce the emissions caused, in some other way.

On the one hand, GHG emitted by flying can be calculated fairly accurately. On the other hand, the costs of offsetting a ton of GHG through a climate protection project can be established. On the whole, reducing a ton of CO2 in an industrialized nation costs more than in a developing nation.

Project example: storing CO2 in biomass and soil through participatory community reforestation in North Gondar

Project development costs of the BOKU Ethiopian climate protection project are comprised to a large part of compensation payments made to the peasants during the first years of livestock exclosure. During the first years of reforestation dependent peasants need to buy foodstuffs and/or use alternative grazing lands. After five years some branches and foliage can be removed from the exclosure area and the livestock fed, without impairing the growth of the trees planted. This 30 year project has calculated total costs as follows:

Year 1

12.500 €

Year 2

8.500 €

Year 3-30

4.000 €

Total costs

133.000 €

Having deducted wood and foliage removal through local land users, this project will store approx. 6,200 tons of CO2 in the coming 30 years. 15% are deducted from this total and retained as risk capital. This functions as a puffer, which can be used for reforestation in the event of unexpected forest fires, calamities (drought, termites) and forest clearance, to compensate for the loss of stored CO2.

Accounting for this risk capital, the project costs correspond to a price of 25 € per ton of CO2. This price is similar to the prices of other carbon offset provides such as My Climate or Atmosfair.

Air passengers are billed the costs of the CO2 emitted are (25€ / Ton CO2-eq typo3/#_ftn1[1]) and these are invested into a CO2 reduction project. Such climate protection projects can take on different forms and carried out in different sectors, i.e. reforestation of degraded land or the replacement of a diesel generator with a photovoltaic call as a means of generating de-central electricity. If these measures are additional (i.e. they are only made possible through the money acquired through offsetting) then the quantity of GHG emitted by the air passenger, is offset.

Many costs caused by current activity only accrue in the future (i.e. raising the level of flood dams in reaction to extreme weather events) are not rated in monetary terms and are imposed upon the commons and/or future generations. Carbon offsetting is a means of paying the true costs caused by current activity. The Stern Review determined 2006 that it makes more economic sense to invest in climate protection today, rather than carry the costs of expensive climate adaptation measures in the future.

[1] Greenhouse gases have varying effects on the climate (methane, for example, is 21 times more climate effective than CO2). CO2-eq refers to greenhouse gases which have been converted to the climate effect of CO2.